3 Essential Costs When Running An E-Commerce Business

Contrary to popular belief, online sales represent only a small percentage of the total retail revenues in Australia. However, the growth over the years is phenomenal. It is surpassing brick-and-mortar sales in almost all consumer categories. By 2021, the market value will reach over $35 billion.

If you’re a retailer or any business owner, running an online store today is one of the smartest decisions you will ever make. E-commerce, though, isn’t for free. If you are not careful, unnecessary spending will only drain both your capital and profit.

If you want to maximize business growth, here are the general costs associated with running an e-commerce site:

1.) E-Commerce Website:

Can you sell on social media? The answer is yes, but functionalities there are severely limited. When you want to provide the best shopping experience, you need to have an e-commerce site.

You have many options for this one. For example, you can go DIY. Two possibilities are Wix and Shopify:

• On Wix, the pricing plan ranges from $17 to $35 per month. Depending on the package, you can have a free domain for a year, visitor analytics, unlimited storage and bandwidth, and online payment acceptance.
• On Shopify, it will cost you between $29 and $299 a month. Besides an online store, you can upload an unlimited number of products and create staff accounts. You can also sell at different channels, offer discounts, and secure transactions with SSL certificates.

Another choice is to hire a Shopify web design company. The actual costs can vary, and usually, it’s pricier than doing it yourself. However, you get added value. You are less likely to make expensive mistakes with a team. You can also have a more brand-centric store design.

2.) Social Media Marketing:

If you’re not offering your products and services on social media, then you’re missing a vital marketing strategy. According to the data compiled by HubSpot:

• At least half of the world’s population are active social media users.
• Around 90% of the users are millennials, a fast-growing consumer sector globally. However, baby boomers are on these platforms, too, with 48% owning a social media account.
• Over 50% of account owners use social media to learn more about a brand, product, or service.

Most social media advertising options charge a cost per click (CPC). It means you pay for every click your target market makes. The amount varies significantly. In 2016, the average CPC in Australia was nearly $0.80. However, the average CPC globally is around $0.35, according to AdEspresso.

Another factor that can affect the cost is the keyword. The more popular it is, the costlier it gets. The good news is you set your budget, which can be as low as $5 per campaign.

3.) Australian Business Number (ABN):

In Australia, the purpose of selling determines whether you need to register the site as a business or not. If it’s a hobby, you have the option to record only your business name. However, the problem is that those who live in other states might also use the same name.

Getting an Australian business number (ABN) can also improve your credibility and reduce the risk of tax issues later. Besides, this is for free unless you plan to work with a tax specialist or an accountant. If you prefer to do that, the cost of services can range from $79 to $110.

Running a business means spending money. But if you’re wise, every decision is an investment.